Facebook Testing its Own Version of PayPal

According to reports by AllThingsD, Facebook is planning to test a a new payments product that would allow online shoppers to make purchases on mobile apps using their Facebook login information.

It is expected that the test will be launched next month. However, any other specific details about further growth have not been released.

The goal of this new product is to work to simplify the entire online purchasing experience. The plan is that Facebook will offer the service to any user that has stored their credit card info. through the social network. Once it is stored, these users will be able to access the e-commerce apps on their mobile devices in order to pay for their items simply with their credentials from Facebook. The purchase will be made through Facebook via the credit card that is on file.

Thrillist-owned JackThreads, a flash-sale shopping site for young men, is the pilot partner. The company has a strong relationship with Facebook, sees a good chunk of revenue come through mobile phone purchases, and may also have a decent demographic overlap with one particular segment of Facebook users — gamers — who would have provided the social network with credit card information. It will be interesting to see if Fab, another close partner of Facebook’s that does well on mobile devices, will follow suit.

A spokesman from PayPal has recently released the statement:

“We have a great relationship with Facebook and expect that to continue. Our customers love using PayPal on Facebook. We’ve been investing in mobile payments since 2006, and last year 10 percent of our total payment volume — $14 billion — was from mobile devices. However, we always welcome competition and are looking forward to seeing what Facebook will announce.

It will be interesting to see how many users will be willing to share their credit card information with Facebook, seeing that traditionally mist people do not trust social media sites with sensitive information like financial details.